AUBURN, Alabama – Gus Malzahn's annual $2.3 million, five-year contract with Auburn can be supplemented with an additional $1.5 million in academic and performance bonuses, according to the letter of agreement he signed with the university.

Auburn also said it was paying Malzahn's $700,000 buyout at Arkansas State. Malzahn was hired as Auburn's football coach Tuesday.

The letter released Wednesday says the formal contract should be signed no later than Jan. 15.

Malzahn will sign a formal contract after lawyers hammer out the details.

The letter states that Malzahn will be responsible for assembling his coaching staff and "promoting an atmosphere of compliance."

The letter says if Malzahn is terminated without cause, Auburn would pay him his base salary for each year, which is $500,000 annually before endorsement and other fees. If terminated with cause, Auburn would not pay him.

The Arkansas State buyout, the letter said, is considered a loan. The loan will be forgiven 20 percent each year over the length of the contract.